francine: a warning from boris worn noas both sides deal is now likely. pandemic support. stimulus plane a after resolving a standoff with hungary and poland. and airbnb skyrockets. . major u.s. listing can the company hang on to its

valuation? good morning, everyone. welcome to "bloomberg surveillance." i am francine lacqua here in london. happy friday. i know a lot of you will find relief in the weekend. washington, saving oil, achieving a pre-pandemic high, oil rebounding, bloomberg markets fighting to its highest level since 2014. now there is a story that we need to bring to you, the chinese authorities, and i am looking at my bloomberg terminal, because this is a developing story, chinese onhorities have detained -- suspicion of endangering national security. she lost contact with one of our at 11:30 a.m. local

time, and we understand she would be escorted. reporters in our beijing, so we will have plenty more on that throughout the day. disappearance, bloomberg sought information from the chinese embassy in washington. we will have more on that. about brexit, the you you -- let's talk about brexit. the e.u. and u.k. are both warning that a no deal is imminent. poors johnson is warning eu leaders to step in. the u.k. prime minister has pledged to go to paris in search of a deal. now let's get the latest from our maria tadeo in brussels. good morning to you. are we actually heading for a no

deal? maria: it is a hard question to answer, but ursula von der leyen did give a briefing a few minutes ago to european leaders. she spoke for less than 10 minutes and told them that she believes, at this stage, the probability of a no deal brexit is higher than that of a deal, and by sunday, there should be a picture as to where things are going. she also said, frankly, there is none of thee, and leaders responded to her intervention. it was less than 10 minutes. a no deals ready for that can take the australia option, which means no deal, also, but he says he is ready to go to paris, he is happy to go to brussels to get a deal. get anhe was hoping to intervention from emmanuel macron. clearly, judging by the briefing, no european leader saying that that

moment just did not happen. francine: maria, we keep hearing rumors that can be postponed to 2021. what would be the advantages of that? is it really palatable for the u.k., when this has been dragging for a while? maria: well, the u.k., they always say they do not want to extend and they do not want brexit to drag on. if at the end of the year, they are going to go for the wto, and that is the end of the story. they do not want to continue the cycle into a very long extension. they say negotiating a 2021 would be very difficult. they have been working all night, francine, on climate, rule of law, and only dedicated this, 10 minutes today, they want to move forward with their own agenda, but i have to say i have never heard anyone say that

this is a viable option. they say they have a -- they have three weeks to get it done. extra time to get ratified, it is a different story, but to continue deals in 2021, it is an option that the europeans just do not favor. francine: thank you so much, maria tadeo, and brussels. joining us also for what this economy is simon french, chief economist at tranmere garden. simon, given we are still dealing with covid, we are in a pandemic, and with a no deal, there will be quite a lot of disruptions. simon: it is important to put 2021 into correct context. the midterm response to a no deal would be to shape and argue 200 basis points of u.k. growth next year, but it is still likely to be something in the growth, 4%, 5% of gdp which would be the fastest rate in 60 years. and actually, to some extent,

that will be a function of how far the u.k. economy found themselves, and 11% contraction, probably, and 2020. we need to put the marginal impact of a no deal against the backdrop of what will be a coven vaccine-led recovery, and that will be the real challenge for ,eople who say to hang on significant friction near term, it would be quite difficult to see. francine: simon, what is the top line for pound? what does pound do, and what exactly is it looking at? if we have a no deal, is it that the price could be less than what is currently priced in? simon: so i think certainly going into this week, traders were positioned with a potential upside of sterling dollar around 1.40 just around the level.

the downside here in a weakish dollar environment is not down to the keen levels, you are probably looking to a tracing down to the high 1.20 in the event of a no deal, but the trend is pushing through to core inflation in the u.k. we have heard warnings from the food industry that there are other factors, you know, capacity constraints, pushing up pork prices. those are the kinds of things that will change the inflationary outlook, which will make investors want to buy back in on a rebound of sterling, soy weakness, a prolonged weakness, one of having been there for 4.5 years, in the event of a no deal. we have an eun, budget, a recovery plan that stays comprehensive, also eu leaders coming up with a more comprehensive plan for gas emissions. what does that mean for the

recovery of the eu, and how much impact? brexit hit france and germany? simon: we should not lose sight that there is a wto relationship between the eu and u.k., given the trade that the eu has with the u.k. it is not going to be insignificant, but it will be focused on those economies that have the tightest relationship, the tightest relationship with the u.k. you think about northern france, netherlands, belgium. theany more in international impacts, but there will be sub-stories, subsector eurozone and new level impacts, but in the grand scheme of things, and against the backdrop of both the stimulus package announced by christine lagarde and the overnight confirmation of the trillion euro recovery package, i think it is, you know, third in the list of

importance, which is why -- and maria is spot on -- why you need to this morning pay such little attention to brexit, because you see the pound, bigger fish to fry. francine: but will have bigger fish actually be enough to sustain a recovery? even what we heard about the ecb, they are concerned about euro strength. they cannot really do much about it. and the recovery can take longer, you know, to take place without the u.k. is the question, because overall, even in the event of the ecb forecast, modeled most central banks on an orderly transition. they were still modeling 1.3% inflation, 1.4% inflation by with even with money, even a stimulus package, even with the announcements from the governing council, and yet is that likely the risk to the

downside likely to increase as a result of a brexit deal? absolutely. but in the grand scheme of things, i think euro-focused investors would have been more worried if hungary and poland had been holdouts of the recovery fund, based on the brexit deal. it is a narrow but acute issue, particularly in europe, but it is only about 2% of gdp compared to the u.k., it is 12% of gdp, that trade in relationship. francine: when do we have to reach unity to reach a fall and deep recovery? i think this is the big determinant in the growth profile, how quickly can that happen, our base case is it starts at q3, appears to be the moment where sectors of the economy have been acutely impacted by social distancing measures, start to be able to

return to a degree of normality, and you start to see that recovery be broad-based, not just in the sectors that have been able to adapt to the delivery method, but those that are reliant on that interaction. so we think it will be the second half of 2021 recovery story with the strongest quarter on quarter growth being in the third quarter of the year. francine: simon, thank you so much, simon french of panmure gordon. no sign of a deal. we also speak to the former prime minister, theresa may's, de facto deputy, david lidington. plus, more on airbnb's record-breaking ipo. that is coming up next, and this is bloomberg. ♪ d this is bloomberg. ♪

>> you just had indications at your opening price at $139 a share, which is double what you priced at. i mean, are you at all concerned about stocks? what do you think about that number and the potential that you are leaving billions of dollars on the table? >> that is the first time i have heard that member. in april, that price would have priced us around $35, so i don't know what

else to say. that is -- i am very humbled by it. that was all right, the airbnb chief executive brian chesky speaking to bloomberg after the company's debut yesterday. is valuation reach $100 billion. let's bring you a breaking story from china and one of our own reporters. have detained her on suspicion of "endangering national security." her editorlked to around 11:30 p.m. we will have more on that throughout the day, and if we have any news, we will bring it to you, but this is a big development story. 20 days before the end of the , with transition period

no, sign of a deal, how should the u.k. approach negotiations with the eu? boris johnson says they should tradeepare for effectively under the rules of the wto. was, untilst recently, at the heart of government. joining us is david lidington, former cabinet minister and theresa may's former deputy. thank you for joining us on the program. cards?n the mr. lidington: it is clearly on the cards. i want to see a deal done. no deal would be damaging to the u.k. both in business terms and clearly unconstitutional terms, the impact on the scottish independent debate. but my fear has always been that if things wait until the last moment, then the negotiators just would not have the time to compromises,ls and

a sequencing of different moves by either side arranged, and i very much hope still within the days ahead that the british government and the european commission are able to make those compromises, because a no deal is basically bad news for either side. francine: if there the political will to find a deal from the u.k. side? mr. lidington: i believe the prime minister when he says he wants to have a deal. i regret the fact that the serious engagement has taken so top littlewhen the forces -- boris johnson, ursula von der leyen, angela merkel -- get involved, but the big trade-offs can be made, and i think that the u.k. government has been slow to recognize and explain that there has to be

trade-offs. privilegeding a access, tariff-free, quota-free, this very important market of the european union, by far our biggest trading partner anywhere in the world, and, you know, they are going to demand a price. for that, part of it is going to be they see it to guard against the risk off competition and dumping on their markets without tariffs and quotas, so there will have to be a discussion. and as i look at it, the gaps are relatively narrow, both on the circle level playing field, you know, the extent to which the u.k. and the eu agreed to follow common standards, to avoid the risk of competition, and on fisheries, where i think i would accept the u.k. is going to be in control of its waters.

the question is -- what are the transitional arrangements? how long should they become a given that you have a lot of european fishing businesses that have built up the exultation of fishing in u.k. waters, and u.k. fishermen need to be able to go in europe. it is not even just sold to british people, it is total over the earth. francine: are you expecting horse johnson to do a compromise at the last minute? mr. lidington: i hope he does. i mean, i don't know for certain which way he will jump or indeed what moves the condition might make. if thery confident that prime minister agrees to the terms of a deal, and that would mean compromise from both sides, he will get it through parliament relatively easily. most mp's in the conservative party will back him, since he won a very big conservative

majority in the 2019 election, and the main labour opposition party has also indicated pretty clearly that they will vote in favor of a deal, because they know that a no deal outcome would be so damaging. they don't want to take the risk of falling into that by default. francine: thank you so much, david lidington, former u.k. cabinet minister, talking to us on brexit on this very important date. gap.g up, a 20% pay we discussed diversity in the finance industry. that is coming up next, and this is bloomberg. ♪ mberg. ♪

this is "bloomberg surveillance." i am francine lacqua here in london. the lender disclose the finding over diversity. 's are joined by bloomberg jennifer zabasajja. what did they find? jennifer: representation at the top of these companies are still really lacking, and they have been struggling to get their numbers up. this found, as you mentioned, black employees were found to make 20% less than their peers but even the bonus pay gap was more stark at 27.6% of that of

their colleagues. what this notices there have been improvements made in bringing minorities in to the companies, but there is still a district portion underrepresentation of minorities at senior level ranks, so they have set up an action and to help establish and alsoblack employees but recruit people and create a culture that supports these employees, and they also just announced a new chair of their black business advisory committee, claude ian read, and a cultureto work with that creates a better company for black employees to work in, and they plan to share their findings in the first quarter of 2021. companytable that the made their metrics public, but it is also notable that they are taking actionable steps to improving the culture, improving the company, and improving diversity altogether. francine: thank you so much, jennifer zabasajja, bloomberg

"quick take" reporter in new york . coming up, we will speak with standard life aberdeen's chairman douglas flint. that is next, and this is bloomberg. ♪ mberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. let's get to the bloomberg first

word news with leigh-ann gerrans. leigh-ann: chinese authorities have detained a bloomberg news staff member, haze fan. that she was not in contact with her editors as of monday, and it was not until thursday it was found she was being held on suspicion of national security. china says the cases under investigation. the u.s. plan sanctions on turkey over its purchase of a russian missile defense system. bloomberg says president trump has signed off on the measures but did not say what they actually included. turkey defended the move, saying it needed an air defense system and its allies didn't offer alternatives. swapping afrance is lockdown for a curfew.

theaters, museums, and cinemas will remain closed instead of reopening next week. the nighttime curfew will take effect on december 15, although an exception will be made for christmas eve. travel across france will now also be allowed. in london, it is on course for the toughest covid restrictions after new data shows the region has the highest rate of cases in england. it comes as a survey shows brits are warming to the idea of getting vaccinated. according to the polls, 70 percent say they are prepared to take the jab. that is a greater proportion than in the u.s., germany, france, sweden, and also japan. a panel of u.s. government advisers is backing the vaccine from pfizer and biontech. it clears away for emergency authorization by the food and drug administration. that approval could come within days, and people could start getting vaccinated just a few days after that.

global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm 120 countries, leigh-ann gerrans. this is bloomberg. francine? francine: with the u.k. and e.u. oath warning it is unlikely, what would no deal scenario look like for the london financial services sector? boris johnson wants you leaders to step in, but was frustrated last night when summit talks overran, knocking brexit talks off the agenda. the prime minister says the u.k. should prepare to leave without a deal. joining us now is douglas flint, chairman at standard life aberdeen. thank you so much for joining us. what would a no deal in your eyes mean for the city of london and financial services? far as the city of london, financial services is concerned, i think the city has been preparing for the basis that there would be no deal, the

basis that you have to prepare for the worst to get a better outcome that enables you to improve in that position. i think they are ready for a no deal and -- most importantly our clients are able to access the services they need without interruption. that is the position right across. this weekendors, and in three weekends time we will know with absolute clarity what the arrangements are going to be from the beginning of next year. that will enable businesses to climb. when you look at the posturing at the negotiations, are you at this point expecting a deal? know.s: i really don't i don't think i would give better insight than anybody

else. if there is a deal, it would be quite a modest deal come at us time goes on, both sides will try to improve the position that we end up on the first of january. publishedas literature on contingency arrangements, and i think that will say when the stress lines are -- where the stress lines are. it is more likely than not that we are heading toward a very thin deal or no deal, and we have to adjust if that is the case. what is your worst-case scenario? , andis were to be delayed there are talks among diplomats that it could happen or not, some kind of moratorium, so we back -- we go back to the negotiating table in four to six months -- what would that mean for financial services? douglas: the longer there is uncertainty, if we end up with no deal or a thin deal, many sectors will want there to be a

broader deal negotiated, and of course if we end up in a situation that is unattractive to both sides, both sides will begin to get propriety -- will get propriety on what it no deal or a thin deal means. position the economic from both sides of the argument, i am sure that number to what happens, i'm sure there are going to be individual discussions and broader discussions going on for some time. francine: what are you expecting the markets overall to be in 2021? is there a danger that the markets say one thing but fundamentals don't support it so much? douglas: i think there is going to be a lot of divergence in many respects for an active fund

manager. i mean, i think that the discounting of the vaccine is probably a little bit ahead of where we think it will be. it will be rolled out progressively during the year, and the elements that are most vulnerable at the moment in terms of getting the vaccine. the younger elements are going to be later in the cycle than those at risk of having a very bad effect. i think we will see this progressively through the year. what is very good if that we are seeing a variety of vaccines come through, and remarkably quicktime, and we are also seeing more and more diagnostic tests being available, and i think it is the combination of vaccine plus diagnostic tests that enables thick -- nibbles vaccines and individuals to know what they will be like in 2021 and beyond. francine: is passive investing the future for standard life aberdeen? douglas: it is going to be part

of the mix. there are elements that are going to be done passive investing where people with relatively modest amounts of money want to cross spread at low cost. that is part of the mix and we can see how successful that has been, but for our more sophisticated clients, the wholesale channels, they are looking for solutions, and that generalen just the markets referencing products. there will be room for both. indeed, there will be much more utilization of techniques to package attributes to get people exposure to what we want in a much more sophisticated way and there has ever been possible before through etf's and the like. isncine: passive investing arguably a very competitive market. will you need to buy companies to put better footing in a

passive space? toglas: we certainly need increase our visibility. the question is how quickly we can scale it up. i think just like the best retailers, we need a range of products that means our clients can get from us everything from pure passive to the most sophisticated so that they stay with the investment through all of their needs, and as their risk preferences change and there geographic preferences change, and they are seeking to address change. we want to have a full range of products that we can say, whatever you want to do, we have a product that meets your needs. francine: what kind of acquisitions would you be looking at, if it is something that you would explore, to be more substantial in that space? douglas: it is a question of scale.

we have the technology, the technical skills to do everything at the moment. the question is whether there are assets -- aspects that we quicker, add something at an institution at a technology company, that it already broadened the range in how they address etf's or passive products. that is a possibility. but again, it would be a question of looking at something relatives what the cost would be at the time frame would take for us to build up in selected areas we choose to expand into. so there is a question, do we get a scale advantage? do we do an acceleration of where we think you need to go? but the range of products will be broader because that is where the market is, that is where our client is supposed to be. francine: thank you so much, standard lifefrom aberdeen. repairing the home rental

company for a 100 billion dollar valuation -- more on that story later this hour. up next, we will continue our conversation with douglas flint, the chair of standard life aberdeen. this is bloomberg. ♪

francine: this is "bloomberg surveillance." let's get straight to the bloomberg business with leigh-ann gerrans. leigh-ann: airbnb shares more than doubled in the home rental platform's debut, one of the biggest first-day rallies on record. airbnb's market values makes in the world's biggest online travel company. this a day earlier, doordash

started with its public debut, adding to the rush of year end ipo's. the carmakerrdered to halt logging at a construction site, asking delays to his first electric car factory in europe. the temporary halt is meant to give the court time to examine claims by environmental groups, who are saying the u.s. companies not doing enough to protect local lizards and snakes. gary cohn refusing to return millions and pay to goldman sachs, but he has come up with a workaround. he's giving the money to charity. the bank is demanding he returned more than $10 million to demonstrate accountability for the company's involvement in a scandal that cohen refused -- in a scandal, but cohen refused. he said he will donate that money instead. get more withs

douglas flint from standard life aberdeen, with us for next was of conversation this morning. we were talking about passive versus active investment and where you are taking standard life aberdeen. how do you think the pandemic, the working from home, change investing forever? douglas: well, i think it is going to show that many of the sectors that have been incredibly powerful in their investment for performance this year will continue to be so. the working from home environment has put a huge amount of emphasis on technology, on networking, on communications. and one can see that going backwards -- one cannot see that going backwards. in terms of a central waiting, those sectors will be heavily weighted. i think we are using technology much better. if 12 months ago you would have said that we would have been able to equip our entire workforce to work from home successfully and without glitches in the execution

capabilities that we had in terms of adding for clients and continuing to connect to clients and build solutions in a remote way, i think if you had said that was possible four months ago, they would have been a lot of skepticism. there have been some elements that the way we have done business, that will continue even if we go back to the way things were before because we have discovered elements of efficiency that would have taken a lot longer. i think from a people perspective -- i was on sort of a christmas gathering virtually of many of our employees last night, and they were saying they have been able to connect with more of their colleagues internationally than they have ever done before because everyone is at home. bringing people in at appropriate times of day, you can be far more connected than you have ever been before.

there have been some quite big wins as well as some challenges, but it will change. , it hasbusiness is done a long way to flow through. francine: do you believe that standard life aberdeen needs a radical new strategy to stop the investor outflows? if it is something that you need, what would that be? radical we don't need a new strategy. basically, our strategy is to deliver what our clients want. i think that stephen byrd having come in at the end of what was a complex and absorbing process could -- putting two businesses together, with the sale of the life business, coming in as it was getting to the end of that cycle, he has come in with a growth agenda, he has come in --h an in norma's commit enormous commitment.

we have the capabilities, we've got the skill sets. it is just a question of outward facing, and as the marketplace adjusts because of the coronavirus and the bill that will follow it, there is a huge opportunity for an asset manager with broad products to support. i think one of the things that , how wey important is use our firepower and the mandate that we have by asset owners to engage in that reconstruction in economies, particular within the esg, that is where we are, spending a lot of time designing that. francine: i know you started a formal auction for part many him. how many people are interested? douglas: all i can say is that the process is underway and we are very pleased with the interest that is being shown. francine: both you and the chief

executive have so much experience in asia. is that something where you want to be more present? is there any opportunity to really tap that region? douglas: we both have spent much of our career, most of our careers around asian markets. clearly asia is today growing faster again there the rest of the world. the demographics of asia and the savings needs of asia, and the formalization of retirement savings are creating great opportunities, both in terms of investing in companies in the region, but also providing products to citizens in that part of the world, and indeed to the institutions, are beginning to allocate some of their savings. outside the region. i think it will be the largest growth and global savings will be coming out of asia over the next 10, 20 years. francine: so how much are you expecting to boost your presence in asia by?

douglas: we already have a very strong presence in asia, based in singapore, we have a presence in hong kong, we have operations in china, we have a full license. we have a joint venture with a life business. license know, getting permissions and so on and so forth is a steady process. but we have a lot of opportunities in this country, and a lot of opportunities in europe and america, but definitely asia will be a bigger part of our business going forward. we will do that selectively but solidly, positively. i think it is a huge opportunity. the fee structure different in asia? is it easier to ask for more? douglas: no, it's not. i mean, i think this is a very transparent industry now. better,e some elements

asia has embraced technology in many ways. some of the stages that we have built in historically in the u.k. and europe, but, no, it is a very competitive marketplace, and you can see from the number of major global asset management firms entering or expanding their businesses in china and asia generally, that it is going to be a very competitive space. i don't think there are any sort of and vetted opportunities for excess -- i think we are in a competitive world, and that's good because it means we have to and demonstrate the product as well as the investment skill that we have. francine: douglas flint, thank you so much for joining us today. he is the chairman at standard life aberdeen, an exclusive conversation this morning. ipo popees the biggest on record, raising $1 billion.

did the company raise -- did the company leaves -- leaves too much money on the table? we will talk about that next. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. in the span of 24 hours, two record-breaking ipos hit the u.s. market. first it was doordash, than 115%b, whose shares opened above its ipo price. the gap has renewed a years long debate about how to price new listings. joining us to discuss this is dani burger. i have to say it is pretty crazy . even the chief executive things it is crazy what was going on at the open. it airbnb get their pricing wrong? dani: i guess it depends on what their goal is, francine. often companies with ipo's don't get this big post listing ipo, so failure might be a little too strong, but the ideas that might dampen demand from retail investors if there is not the strong first day price gain.

but also at the same time, when they turn up that big pop, it gives to concerns like we are having today, like the debate that perhaps airbnb left too much money on the table, that there was an additional $400 billion if they had priced those shares more closely to what they had traded at. when it comes to fundamentals, that is a different question. but what we did see, part of the reason this is happening is the supply-demand dynamic was a fever of these shares rally and, airbnb only offering 8% of available shares to purchase. retail investors wanting to rush in and buy it. and that sort of balance meant that we saw this huge surge in share prices, francine. francine: dani burger, thank you so much. we will have a look at airbnb and also doordash. we are being briefed in brussels extraordinary -- two main stories that came out. ryan -- that mr. mike

mr. macron is talking about cutting emission gases in europe, and that will lead the way in terms of climate change action. we are being briefed right now in brussels, the final press conference. they pulled an all-nighter, not like these leaders to do that. they do that every so often. but of course the main other question which has not been addressed is the e.u. and the u.k. both warned that the outcome of talks could be a no deal. that is more than part of the discussion of the e.u. deal summit. we will bring you any breaking out of that. bloomberg surveillance continues. this is bloomberg. ♪

francine: "prepare for no

deal." that is the warning from boris johnson as the mood sours on both sides of the channel. both sides warn no deal is now likely. pandemic support. european leaders approve a 1.8 trillion euro stimulus plan after resolving a standoff with hungary and poland. and chinese the 30's have detained a bloomberg news staff member in beijing on suspicion of endangering national security. this is "bloomberg surveillance." good morning, everyone. i'm francine lacqua in london. tom keene in new york. the news flow is absolutely terrific. we look to a no deal brexit, which is what we have been briefed by both sides. we were also briefed i people inside the government here. we'll have to see if there is the political will to find an agreement. it could happen in the next couple of days, it could not happen at all. leadersat the e.u. summit. i know the council president